The History of Credit Card Terminals

I have been searching around for several days now, and I cant seem to find a decent resource as to history pertaining to credit card acceptance and the bankcard business. The next few posts will be a series of history related articles.

Credit card terminals which have a place on the counter of millions of businesses have a very short history. This would most likely explain why the terminals that are most common today are using technology that is 20 years old. Much like the military, credit card terminals base their technology on reliability and security. While new technologies can offer great security, these technologies have not been time tested and are slow to make their way into payment processing.

1. Manual Imprinters
   • Manual Imprinters have been around since the beginning of a wide acceptance of credit cards. They are still as widely used and are considered a great backup processing method when a businesses primary method is unavailable. Originally, merchants would imprint their customers cards and then mail their slips into their bank. This process was time consuming and did not offer the speed or instant transfer capabilities that are standard today. Using a manual imprinter now, merchants can call in transactions for instant approval. The transactions are now electronically deposited into a businesses bank account.
2. Electronic Authorizations
   • The first electronic credit card authorizations were done over the phone, and often took upward of 5 minutes. Merchants had the choice of imprinting their transactions or calling in for an authorization. Because of the long waiting time for authorizing a transaction over the phone, many businesses opted for voice authorization only on larger transactions.
3. Point of Sale Terminals
   • Point of sale terminals emerged in 1979, when Visa introduced a bulky electronic data capturing terminal. This was the first of credit card terminals as we know them today, and greatly reduced the time required to process a credit card. In the same year, MasterCharge became MasterCard and credit cards were replaced to include a magnetic information stripe.
     1979 was a turning point in the credit card processing industry.

   • Verifone:
     In 1981 a small electronics company started in Hawaii that we now know as Verifone. Verifone’s first contract was a 200 terminal order from Tymshare. In 1983 Verifone introduced the ZON terminal which was the first terminal that could be considered modern. The ZON series terminals set the standard for all credit card terminals, and are still being used by many merchants today. ZON terminals led the way for the Tranz series terminals and later the Omni series terminals from Verifone. To this day, Verifone has maintained their line of best selling terminals in the world. Verifone is the largest manufacturer of processing terminals in the world.
   • Hypercom:
     Hypercom is the number 2 market leader in processing terminals, and since its change to payment processing technologies in 1982, has been the main global competitor of Verifone. Hypercom through the years has manufactured a long line of reliable processing terminals, both in printer and printer-less form. The Hypercom T7P has been on of the best selling terminals in history, and the newer Hypercom T7 Plus, is a steady competitor to any comparable terminal. Hypercom also manufacturers the ICE series terminals which are highly advanced and made to handle large customer processing applications, which are being replaced by the Optimum series terminals. Hypercom’s Optimum T4100 is already competing as a worthy high-end terminal.
   • Lipman:
     In 1994 Lipman Electronic Engineering, Ltd. was established in Israel. Lipman quickly grew, and now has offices and distributors in nearly every country in the world. Lipman is the manufacturer of the Nurit line of processing terminals. Because of Verifone’s already firm place in the payment processing industry when Lipman was established, Lipman targeted an untapped niche in the processing industry. While, Lipman holds about a 10% share in wired credit card terminals, they are the undisputed leader with more than 95% share in wireless processing terminals. Lipman has produced a variety of terminals since its creation, starting with the Nurit 2070. The most current models are the Nurit 8100 and the Nurit 8000. Of all processing equipment manufacturers, Lipman is the quickest to adapt new technologies into their processing equipment. Although Lipman is know widely for their wireless terminals, their land-line terminals also are some of the most popular and reliable terminals available. The Nurit 2085 is one of the widely used terminals in the US, and offers exceptional ease of use and reliability.
4. Other Equipment Manufacturers:
   • Verifone, Hypercom, and Lipman are the big three equipment manufacturers, but there are other important companies that manufacturer processing equipment. Thales, Ingenico, Schlumberger, and Linkpoint are a few of the larger companies. Apriva, Comstar, and eProcessingNetwork are a few of the smaller companies that specialize in wireless technologies.
5. The Future:
   • Credit card processing technology has a lot of room for advancement. Increasing processing speed, reliability and security are driving forces behind processing technology advancement. While IP and WiFi based processing are just emerging, contact-less payments, biotechnology, and smart cards are just around the corner. The processing industry has a lot to look forward to, and will definitely be adapting new technologies in the near future.

References:
Visa History
MasterCard History
Verifone Time-line
Hypercom History
Lipman History

Updated***

We have compiled a timeline of credit card terminal history.